Tanzania: United States Says U.S.$473 Million Developmental Aid Still Suspended

Close to half-a-billion dollars in US development funding for Tanzania remains in limbo despite the Obama administration’s recent announcement of a $407 million aid package for the country, US officials say.

The Millennium Challenge Corporation (MCC), a US government entity that gives conditional grants to developing countries, is continuing its freeze a $473 million development “compact” for Tanzania, an MCC spokeswoman tells The Citizen on Sunday.

Suspension of planning for the initiative was announced in March. MCC officials said then that the Tanzania government’s conduct of elections in Zanzibar and its application of the Cybercrimes Act put the country out of compliance with US criteria for Millennium Challenge assistance.

The US embassy in Dar es Salaam had announced two days earlier that the Obama administration would be providing Tanzania with $407 million in new aid.

That money is being allocated by the US Agency for International Development (Usaid) and is separate from the MCC compact.

The $407 million from Usaid represents the first tranche of a five-year programme intended to help empower Tanzanian women and youth and to sustain inclusive economic growth. The funding also seeks to improve democratic governance in Tanzania, US officials say.

The success of the initial compact with Tanzania led MCC to agree tentatively in 2012 to provide the additional $473 million that is now being withheld. MCC’s board of directors said in March that planning for that compact was being suspended because elections in Zanzibar earlier that month had been “neither inclusive nor representative.”

In addition, the Cybercrimes Act was being used to “limit freedom of expression and association,” MCC said.

The decision by the MCC board means the government will have to carry the burden alone or shelve some of the projects that are key to the energy, infrastructure and agricultural sectors development plans over the next few years. The government was, however, quick to give a reassurance that plans were underway to cover the gap.